Finland’s Biggest Reform Problem Isn’t Technical — It’s the Stories We Tell Ourselves

Foto: Tapio Haaja / Unsplash.

Take the SOTE reform. After more than a decade of design work, political negotiation and expert drafting, we are still struggling with implementation problems: deficits in welfare service counties, shortages in workforce and leadership, and disagreements between ministries, municipalities and regions. [1] The same pattern is visible, in mirror image, in the TE2024 reform, where responsibility for employment services has just moved the other way — from the state down to the municipalities. [2] Different direction, same story: a reform designed with confidence, followed by an implementation phase full of surprises that, somehow, keep catching everyone off guard.

Why does this keep happening? Not because the designers lacked intelligence or because the evidence was unclear. The core problem is structural — and cultural. And it breaks down into three separate, reinforcing failures.

The story we tell ourselves

Finland maintains a strong belief in a clean separation between politics and administration. According to this belief, politicians set goals, and the neutral, competent administration implements them. Those who have worked inside the system recognise however that this divide is far messier in practice. Ministries are small and political; agencies have overlapping roles; municipalities protect their autonomy; and expert working groups — often stacked with the very people who will later have to implement what they design — exercise a quiet, largely invisible form of political power.

This is not simply naivety. It is a genuinely comforting story, and comforting stories are sticky precisely because they are useful: they let politicians claim credit for ‘solving’ a problem the moment a law is passed, they let administrators treat implementation failures as technical glitches rather than as evidence the original design was wrong, and they let everyone avoid the harder conversation about who actually loses out when a reform lands.

Consensus culture plays the same role. While political actors talk about compromise and cooperation, large-scale reforms inevitably create winners and losers. These conflicts are political, not technical. But the Finnish style is to obscure conflict under layers of technical committees, modelling exercises and neutral-sounding policy language. By the time disagreement emerges openly — usually during implementation, when it is far harder and more expensive to accommodate — it is too late to integrate it constructively.

The machine that isn’t there

Believing the story has organisational consequences. Reform designers proceed as if the Finnish state has a single, unified administrative machine, sitting quietly and waiting for instructions. In reality, what exists is a fragmented, multi-layered system — central government, regional bodies, welfare service counties, municipalities, agencies, each with its own budget logic, its own professional culture, and its own incentive to protect its patch. SOTE was never simply a health-and-social-care reform; it was, underneath, an attempt to force twenty years or more of accumulated fragmentation into a single new administrative layer — and then, once the law that had taken two decades to negotiate was finally passed, to have that layer fully up and running within about eighteen months.

It should not have surprised anyone that a machine assembled that fast, out of that many previously separate parts and carrying that much unresolved history, would take years to find its footing — and yet, each time it stumbles, the response tends to be surprise only then to be followed by another round of technical fixes aimed at the symptom rather than the underlying structural mismatch between the design and the machine that has to run it.

The clock nobody is watching

The third failure is about time. Reform design happens at a single moment, under political pressure to produce a clean, comprehensive answer. Implementation happens over years, sometimes decades, subject to elections, budget cycles, staff turnover, and events nobody could have anticipated when the law was drafted.

A design built for a single moment in time is asked to survive contact with a reality that keeps moving. When it inevitably fails to survive that contact unchanged, the gap between the two is treated as an implementation problem to be patched — rarely as evidence that the design phase should have planned, from the outset, for a system that would need to keep adapting long after the ink was dry.

Three failures, one habit

None of these three problems is fatal on its own. Together, though, they form a closed loop. The belief in a clean politics–administration divide (a story we tell ourselves) hides the fact that the implementing machine is fragmented and political (an organisational reality). That hidden fragmentation means the design never accounts for how long, and how unevenly, implementation will actually take (a temporal blind spot). And because the resulting delays and conflicts show up only once implementation is underway, they get filed away as unfortunate one-off surprises — which lets the original comforting story survive, largely untouched, ready to be told again for the next reform.

We need to understand that Finland’s problem is not simply about resources or structures. It is about the narratives that shape how we see our system. When we pretend Finland is more consensual, more unified and more administratively capable than it actually is, we end up designing reforms that no real-world system could implement.

The way forward requires intellectual honesty. We need to acknowledge conflict earlier, recognise capacity limits, and confront the fact that implementation is political from the beginning — not an unfortunate afterthought to the ‘real’ work of policy design. Strengthening administrative leadership, clarifying roles and reducing fragmentation are necessary steps. But they require us first to drop the comforting stories and see the system as it actually is.

Finland’s chronic design–implementation gap is best understood, in the end, as a single problem wearing three faces: cognitive, organisational and temporal. Elite narratives about consensus, pragmatism and innovation fix beliefs in ways that distort reform design from the outset. A mischaracterised politics–administration divide leads designers to assume an implementation capacity that does not exist. And a reform process built around a single moment of design collides, sooner or later, with a fragmented reality that takes years to catch up — or never quite does.

For Finland to improve its reform performance, it must first confront the comforting stories it tells about itself.

This blog draws on research undertaken as part of the author’s doctoral thesis. The views expressed are the author’s own and do not represent the views or positions of MDI, FCG, or any other organisation.

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[1] In February 2025, six wellbeing service counties — Itä-Uusimaa, Keski-Pohjanmaa, Lappi, Pohjois-Karjala, Päijät-Häme and Varsinais-Suomi — issued a joint statement to the Ministry of Finance warning that a structural quirk in the transition-equalisation financing model would leave them permanently underfunded by a combined €85 million a year, affecting roughly 1.2 million residents. This was layered on top of an already sizeable problem: the wellbeing counties collectively ran a deficit of around €1.2 billion in their first year of operation (2023), equivalent to some 4.2% of their total operating costs. See Hallitus täydentää esitystään hyvinvointialueiden alijäämien kattamisen joustoista (Valtioneuvosto); Hyvinvointialueiden rahoitus: 1,2 miljoonaa suomalaista jäämässä pysyvästi eriarvoiseen asemaan (Itä-Uudenmaan hyvinvointialue, 13.2.2025); Hyvinvointialuejohtajien H23-verkoston kannanotto hyvinvointialueiden rahoituksesta (Hyvil).

[2] The Association of Finnish Municipalities (Kuntaliitto) itself estimated, ahead of the 1 January 2025 handover, that the reform was launching under-resourced by roughly €100–150 million, with employment-service funding having already been cut before responsibility even changed hands. Around 4,000 staff transferred from the state to the new municipal employment areas on that single date. See TE-palvelut 2024 -uudistus (Kuntaliitto); Kunnat uudistavat palveluja TE2024-uudistuksen myötä (Itä-Suomen yliopisto / Karelian Institute, 24.4.2025).